Romans, the South East of England’s number one multidisciplinary property services company, have released an updated version of their online Stamp Duty Calculator.
From the 1st of April people purchasing 2nd homes or buy-to-let properties will have to pay a 3% surcharge on each stamp duty band and Romans’ calculator makes it easier for them to understand exactly how much tax to pay.
In an unexpected policy move for the Conservative government, from the 1st of April 2016 people purchasing second homes or buy-to-let properties will have to pay a 3% surcharge in stamp duty, as announced in the recent Autumn Statement.
In light of this, potential investors need to calculate their stamp duty as a matter of urgency.
Many are unaware that the surcharge applies to each stamp duty band and therefore what sounds like a minimal increase, will actually result in a much higher amount of tax being paid, depending on the property purchase price.
For example, when buying a property valued at £250,000 using the current system, buyers of a buy-to-let property or 2nd home would be required to bestow the taxman with £2,500 in stamp duty charges.
With the introduction of the new system at the beginning of the next tax year, those same buyers will have to pay £10,000.
Needless to say, stamp duty calculations such as this have been met with shock by many.
Those in the property sales market are surprised by this change but understand that, with most investments, you have to take the rough with the smooth.
Furthermore, in reality for many buy-to-let purchases this new stamp duty change is broadly in line with the tax paid on purchases pre-2014.
Michael Cook, Managing Director of Romans Lettings, said: “This may not be positive news for landlords, but it’s important to note that for many buy-to-let is a medium to long-term investment and in that sense it will still be very lucrative; with house prices predicted to rise by approximately 25% in the next five years, on-going demand from tenants, and the low buy-to-let mortgage rates currently available.
“We are also seeing a continual upward trend on rents, and I believe we will be seeing at least a 5% increase in rental prices by the end of 2016.
“We are working closely with potential buyers, guiding them through the process so they can effectively budget all the costs involved, but most importantly help them find the right property to suit their investment needs.
“This is the only online Stamp Duty Calculator I have seen which adds clarity for investors and showcases how much money they can save by completing on a property before the legislation changes take place on the 1st of April compared to afterwards.”
Romans’ updated version of their user-friendly online Stamp Duty Calculator has a simple tick box, so buyers of a second home or buy-to-let property can now calculate how much extra money they will have to pay after the 1st of April 2016 compared to beforehand.
In light of this innovative update, Romans hopes to be able to help buyers that are considering purchasing a buy-to-let property or second home realise their ambitions before these tax increases impact the market.
This helpful tool can be found here: www.romans.co.uk/stamp-duty-calculator